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Rolls-Royce said cash burn this year will be lower than feared after it was able to make more staff cuts than expected.
The engine maker said in a trading update that 2021 cash outflow will be lower than its previous guidance of £2bn. It expects to remove more than 8,500 jobs by the end of this year, with the pace of the restructuring running ahead of its plan.
On current trading Rolls reported a gradual recovery of its civil aerospace business and in-line demand from defence customers.
“While external uncertainties clearly remain, we have seen continued gradual recovery in our civil aerospace business, a growing order book in power systems and have secured a significant contract win in defence,” said Rolls-Royce chief executive officer Warren East.
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Furniture retailer Made.com warned that supply chain issues will delay the recognition of between £35m and £45m of revenue into early 2022. The recently floated company cut its current year adjusted ebitda target by between £12m and £15m in spite of reporting strong trading over the second half. Supply of goods from Vietnam has not returned close to normal levels and orders have been placed that should give customers significantly better lead times next year, Made.com said.
Cardboard maker DS Smith hiked its interim dividend after posting an 80 per cent jump in first-half profit. Profitability since the start of the fiscal second half in November has been in line with expectations, it said.
Frasers, Sports Direct’s parent company, said recent trading has remained strong both in store and online. For the first half to October Frasers reported an adjusted pre-tax profit of £186.8m, up 61.7 per cent. Management targeted between £300m and £350m in profit for the full year on the proviso that there are no more substantial UK lockdowns.
Boot maker Dr Martens remained confident of hitting full-year guidance after reporting a 46 per cent improvement in interim pre-tax profit to £61.3m.
Watches of Switzerland said it does not expect the return of tourism and airport business to pre-pandemic levels during its current fiscal year ending April. The retailer posted a 58.6 per cent surge in first-half operating profit to £72.3m.
ITV previewed an investor seminar for its Studios division by setting out a profitability target for the production business. The broadcaster said to expect Studios’ revenues to recover to 2019 levels by next year and targeted margins of between 13 and 15 per cent in the medium term.
Moonpig’s first-half revenue fell 8.5 per cent against a pandemic-boosted comparison period but said annual sales would be at the upper end of its previous guidance range. The online greetings cards and gifts retailer reported £142.6m in sales and adjusted core earnings of £35m, down 15.1 per cent for the period ending October.
Balfour Beatty, FirstGroup, On The Beach, Vertu Motors and Clipper Logistics also delivered updates.
Beyond the Square Mile
The Big Four accounting firms have recorded their strongest collective result since the Enron scandal led to the collapse of Arthur Andersen in 2002, racking up $167.3bn in annual turnover as corporate clients rushed to transform during the coronavirus pandemic.
Foreign investment in emerging market stocks and bonds outside China has come to an abrupt halt over fears that many economies will not recover from the pandemic next year and expectations of higher interest rates.
Instagram CEO Adam Mosseri has called for an external regulator to set rules for how social media companies protect children during a congressional hearing into the effects of the platform on younger users.
Tracking on-the-ground evidence such as the psychological effects of inflation and changing attitudes to debt can send conflicting messages about economic conditions, writes Gillian Tett. “Economists and policymakers need to upgrade their systems for tracking the economy right now, to blend quantitative and qualitative perspectives.”
England’s new coronavirus restrictions and the Downing Street Christmas parties scandal have been covered in depth by the FT’s political and editorial teams. The sight of staff laughing about the breach of Covid rules reinforces the view that the only question which counts in this government is “Can we get away with it?”, writes Robert Shrimsley.
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